FY 2014 Appropriations So Far: A Roundup

With the Congressional session resuming next week, we’ve put together an overview of where appropriations stand so far, with an agency-by-agency summary for the largest federal R&D funders including a full set of charts and graphs. The full recap can be downloaded here (PDF).

Overview. Early on in the appropriations cycle, the House targeted a few areas in particular for cuts or constraints (see chart), among them low-carbon energy and natural resources. At the same time, other areas like defense and agriculture would be spared deeper cuts. So far, this approach has been borne out in R&D funding (chart below). In relative terms, the House and Senate have tended to get somewhat closer together in R&D funds for defense, agriculture, veterans’ health research, and homeland security. The largest relative gaps come in R&D for energy and natural resources, as expected, and to a lesser extent the “general science” agencies like the National Science Foundation. Some of the biggest targets in the House have included EPA and the Department of Energy’s technology programs, among others.

In a great many other areas, the House has kept funding relatively close to FY 2013 post-sequester levels. Conversely, it’s difficult to identify those areas of particular favor in the Senate, as the vast majority of R&D programs would naturally receive increases above sequester levels – and House appropriations – under the various Senate spending bills (see graph at bottom). Such are the implications of big-picture fiscal politics at the agency and program level.

Between FY 2010 and FY 2013, federal R&D expenditures declined by 16.3 percent; this is the fastest decline over any three-year period since the end of the space race. At the same time, federal R&D as a share of gross domestic product has declined from 1.27 percent of GDP to roughly 0.82 percent today; it’s also declined as a share of the federal budget overall (graph at right). Even under the best possible scenario, this year’s appropriations won’t make a dent in these trends.

Outlook. No one can predict what will happen in the next few months, though a moderate level of pessimism would not be unwarranted. While the Appropriations Committees have managed to get most of their work done, the process has broken down after that, with only four bills through the House and none through the Senate, and recurrent veto threats from the White House due to the House’s embrace of sequester-level spending. Given current politics, many individual spending bills have been destined for failure from the start.

Congress has a very limited time indeed to finish the work of appropriations before the fiscal year ends September 30. To avoid a shutdown, a continuing resolution (CR) to extend FY 2013 funding partway into FY 2014 is virtually guaranteed, with perhaps some limited changes in agency or program budgets included. Agencies tend to spend more conservatively under a CR anyway, and complicating things this year is the fact that discretionary spending is scheduled by law to go down even further in FY 2014, by about 2 percent below FY 2013, unless Congress acts to adjust spending levels.

At this juncture, given the parties’ calcified positions on taxes and entitlements – the real problem areas for fiscal reform – the prospects for anything more than limited compromise on discretionary spending appear dim. Sequestration was intended to be the “gun to the head” of the two parties, to prompt a smarter, broader budget deal. Clearly, the gun wasn’t big enough. For R&D funding, unless the current fiscal politics changes, FY 2014 could end up looking quite a bit like FY 2013.